8:04 am, April 6, 2023
Lookers has revealed plans to be a major player in the used EV market.
Many dealerships are reining in their enthusiasm for EVs because of plummeting prices in the second-hand market, but the listed dealer group is bucking the trend.
At our Car Dealer Live conference last month, four independent used car dealers said they were now avoiding buying used EVs because of the rapidly falling prices.
However, speaking to Car Dealer yesterday after Lookers announced its results for 2022, chief operating officer Duncan McPhee said the Car Dealer Top 100 company was looking to spend £5.6m on building its first standalone multi-franchise CarHub in Middlesbrough this year.
Due to open in the last quarter of this year if granted planning permission, the site would be ‘a destination centre’, he said, with multi-brand used cars, multi-brand value servicing, cosmetic repairs, EV charging with six 150kW supercharger points, plus an EV experience centre where people can learn about EVs.
‘That site will come under the banner of “Buy, Fix, Recharge and Learn”. We’re charging ahead! It’ll give us a good lead into 2024,’ he said.
‘Ensuring we’ve got the right charging infrastructure across the board is really important to us. Outperformance of the market with our EV brands is important to us.
‘Given the ban that’s coming, you need to be in a position of strength when it comes to EV, and I think we are exactly in that position.’
McPhee said he was ‘delighted’ with 2022’s results, despite the underlying pre-tax profit figure sliding by eight per cent to just below £83m.
He reiterated that 2021’s figure of £90.1m had included nearly £10m of Covid support, and called 2022’s figures ‘a great result’ when looking at the underlying total, adding: ‘It’s fair to say we’ve delivered another excellent performance despite the supply disruption, inflation and rising interest rates.’
Duncan McPhee says Lookers is ensuring it’s in a position of strength when it comes to EVs
McPhee also emphasised that 2022 had started with the market estimating a £55m underlying pre-tax profit for the year, with expectations improving over the months.
He added: ‘It’s been a challenging year. We came into it not knowing what to expect in terms of supply, interest rates, cost-of-living crisis, inflation and utility bills, so given where we are, I think it would be fair to say that we are delighted with our results.
‘It’s fantastic news. We’re very happy indeed!’
Quizzed about how much of the government support had been paid back, McPhee said the furlough element had been repaid in its entirety, although he was unable to give the figure on the spot.
He was also pleased with Lookers’ execution of its six ‘strategic growth pillars’, saying ‘We’ve continued to make great progress there.’ The ‘pillars’ have included expanding its relationship with OEMs and creating new partnerships with manufacturers such as BYD, Ora, Lotus and MG.
Aftersales is also becoming an increasingly important focus – revenue in the division was up 6.8 per cent to £458.4m last year, mainly driven by more parts sales via its trade parts centres plus a rise in cosmetic repair revenues.
By the end of 2022, Lookers had 29 fixed cosmetic repair sites and 20 mobile cosmetic repair vans, while this year it plans to have 20 more sites plus another 10 vans.
McPhee said: ’We’ve dubbed 2023 “The year of aftersales in Lookers”!
‘We’re looking for some really good growth there. We’re looking to improve customer retention, and obviously continuing to build and develop the cosmetic repair solution, which is a big area for aftersales.’
He added that 2023 had started off really well for the company.
‘We’re expecting profit to exceed Q1 last year, and it’s come on all channels really. New car performance has been strong for retail and fleet, used car performance has been very strong – we’re up 10 per cent in volume year on year to the end of March, so we’re really pleased with that.
‘Aftersales has seen further growth across all channels and the cost base remains nice and tightly controlled. Stock is in a good shape, our wonderful Lookers colleagues are all in good form, so we’re in a pretty good place.’
